Polypropylene will continue its weak posture

wallpapers Industry 2020-12-09
Since June,

has seen frequent maintenance of domestic polypropylene plants, and the tight supply side has given some support to the price, which has largely offset the negative impact of the continuous downturn in downstream demand. However, with the resumption of production of polypropylene plants in late July, the supply pressure will quickly appear. In addition, the sharp fall in international oil prices has lowered the cost line of downstream chemicals, and negative factors have emerged, which is expected to break the weak balance environment of the previous polypropylene futures market, so as to strengthen its weak posture of 1509 contract period price. The oversupply of

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has led to a downward shift in the focus of oil price. Recently, with the formal agreement reached in Iran's nuclear negotiations, it means that Iran will regain its voice in the international crude oil market, which may not bring good news to the crude oil market with excess supply. With 10% of the world's crude oil reserves, Iran is the fourth largest oil producer in the world. It can be expected that after the lifting of the sanctions, the Congress will take the fastest action to restore crude oil exports to the level before the sanctions. It is expected that the scale of Iranian crude oil export will increase from the current 1.2 million barrels / day to 2.3 million barrels / day in the future.

and

however, as OPEC's second largest oil producer, Iran shows a positive attitude towards the current global oil supply market share competition, saying that it will promote other OPEC member states to update Qatar's market quota system. Next, the oil producing countries will usher in a new price war for market share, which will undoubtedly further unbalance the relationship between supply and demand of crude oil and further move the focus of oil price down.

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polypropylene plant maintenance period will end

faced with the situation of continuous weak downstream demand, the reason why domestic polypropylene prices showed a relatively anti falling posture in the early stage was mainly due to the large number of maintenance of polypropylene production units since June, and the units of Sinopec Tianjin Petrochemical, Shanghai Petrochemical, Daqing Petrochemical, Panjin Petrochemical, Qingdao oil refining and other enterprises have been put into shutdown maintenance state. As a result, domestic polypropylene supply was relatively tight during this period, and enterprises' inventory digestion was smooth. According to the statistics of

and

, as of the first ten days of July, the maintenance capacity of domestic polypropylene plant was about 2 million tons, and the inventory pressure was significantly lower than that in the first ten days of June. However, it should be noted that although the current polypropylene plant maintenance more, but the duration of the cycle is not long. In addition to the two-month overhaul of Qingdao refinery and Daqing Petrochemical Company, the maintenance of other units is basically completed before the end of July. This means that the supply pressure of polypropylene will appear rapidly in the later period, which will bring great impact to the social inventory. However, in the short term, it is difficult to have centralized maintenance of the plant, and the negative factors of loose supply will accompany polypropylene for a long time, which will become an important incentive to weaken the price of polypropylene. The terminal demand of

and

will continue to be weak. With the steady recovery of domestic polypropylene plant operation rate, the supply pressure of

and

will increase significantly in the future. However, the downstream demand is in the off-season, the state of fatigue is still continuing, and there is no sign of improvement. The addition of new negative factors may break the weak balance pattern of the current market and induce a new round of fall in polypropylene prices.

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it is understood that at present, the downstream plastic knitting production of polypropylene is in the off-season, and affected by the poor economic environment, the operating rate of its enterprises has been maintained at about 50% for 10 consecutive weeks. In order to deal with the impact of insufficient orders of terminal enterprises, some small and medium-sized plastic knitting enterprises choose to stop production and stop work, but it is still difficult to ease the pressure of high inventory of finished products. However, the finished product inventory of membrane material plant is still high. Some production lines choose to stop due to the weak demand recently. The operating rate of enterprises shows a downward trend, and the raw materials are mainly purchased on rigid demand.

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as a whole, the whole chemical industry chain is facing the impact of the downward shift of the upstream crude oil price center, and the weakening of cost support will drag down the price of polypropylene. After the end of the centralized maintenance period of production units, the increased supply pressure and the continuous weakness of downstream demand side will also induce the downward price of polypropylene on the supply and demand side. The author believes that under the emergence of multiple negative factors, the future PP 1509 contract will continue to be a weak position.


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